SDI WINS PENTAGON PACT

Susan Davis International has successfully defended a lucrative PR contract to handle the “America Supports You” campaign for the Department of Defense. Budget for the one-year contract, with four year-long options, is capped at $3M.

A defense spokesman declined to name the other firms that pitched, but said there were three total proposals. He said the unsuccessful firms had not yet been “debriefed.”

During the Q&A process, two prospective bidders complained that the response time between the RFP issuance and the due date for proposals (March 28 and April 17, respectively) was “too aggressive” and favored the incumbent. Wrote one bidder: “I’m absolutely flabbergasted that agencies…are being asked to put together well thought out proposals in a matter of a few weeks.”

Contracting officials extended the deadline by five days, but countered that the RFP did not ask for a lot of details, called for pitches on work not previously performed by SDI, and said the evaluators had experience in the commercial PR field.

The long-running campaign aims to communicate public support of the military to service members and their families.

Among SDI’s assignments are developing a national media strategy, partnerships with businesses, celebrities and other entities, PSAs, internal communications, events, and a “robust” web and interactive campaign.

Davis didn’t return a call.

APCO’S GARVEY TO JPMORGAN CHASE

Jane Garvey, executive VP and head of APCO Worldwide’s transportation unit, has joined JPMorgan Chase’s infrastructure investment practice.

The bank played an advisory and financing role in the $12.8 billion lease deal of the Pennsylvania Turnpikc that was ironed out with Spain’s Abertis (see pg. 2).

Phil Ryan, who heads JPMorgan Chase’s infrastructure practice, sees plenty of opportunities ahead. “[As] federal funding disappears and state and local fiscal positions weaken, public private partnerships are increasingly used as a tool for delivering much needed projects,” according to his memo welcoming Garvey to the bank.

Garvey was Federal Aviation Administration administrator prior to joining APCO. She served from `97 to `02, and played a key role in restoring air travel in the wake of the 9/11 attacks.

Earlier, she was director of Boston’s Logan Airport and commissioner of the Massachusetts Department of Public Works.

SAUDI ARABIA’S REP RESIGNS TEAM MCCAIN

Tom Loeffler, whose firm received $3.6M in lobbying fees from Saudi Arabia during the past year, has resigned as national finance co-chairman of John McCain’s presidential run.

The Kingdom turned to the Loeffler Group in the aftermath of 9/11 to establish and maintain close working relationships with members of Congress.

Loeffler resigned the McCain job due to the campaign’s new policy of banning lobbyists.

Activist groups such as Campaign Money Watch praised Loeffler’s exit and want the same for Charlie Black, McCain’s political advisor.

Black stepped down from Burson-Marsteller’s BKSH & Assocs. in March to devote his efforts full-time to McCain’s race.

BKSH represented the Iraqi National Congress during the run-up to the invasion of Iraq.

SAM ADAMS CHEERS DEVRIES

DeVries PR has picked up the Sam Adams brewing account, according to Boston Beer Co. PR manager Erika Schermerhorn.

DeVries, which is part of Interpublic, won the account after a competitive pitch. Michelle Sullivan, PR director of BBC, cited DeVries’ strong consumer brand experience as key to the win.

BBC is reeling from a voluntary product recall of Sam Adams bottles, which covered about 25 percent of its volume. The cost of drinker rebates, product credits and fees and incentives resulted in a charge of $8.8M.

The recall put BBC $3.8M into the red ink column during the first-quarter. That compares to a $5.8M year earlier profit.

The craft brewer is gearing up for a major expansion following its $55M deal to acquire Diageo North America’s brewery in Pennsylvania’s Lehigh Valley. That facility once brewed Schaefer Beer.

COACH COURSE DEBATED; MOTION FAILS

Sixty-eight representatives of the Hunter College faculty discussed for 45 minutes May 21 the controversial course sponsored by Coach and the International AntiCounterfeiting Committee that was conducted in the spring of 2007.

An attempt to pass a resolution demanding that all such courses be subject to faculty review failed by one vote. The vote was 31-30 in favor but this did not represent a majority of the votes present and the issue will be taken up again in the fall.

(Continued on page 7)

ETHANOL BLAMED FOR HIGH FOOD PRICES

High food prices and depleted supplies of commodities have mobilized consumer marketers to pit some of the blame for those woes on ethanol, the highly subsidized corn-based fuel additive.

Glover Park Group, working for the Grocery Manufacturers Assn., has developed a controversial six-month push to undercut support for ethanol as consumers bristle from high prices at the grocery store. That effort was blasted on May 15 as a “smear campaign” by Iowa Republican Sen. Charles Grassley.

GMA, the powerful trade group for consumer food, beverage and household goods companies, issued a request for proposals in early March for a four-part PR campaign to stymie support for ethanol subsidies and mandates.

Glover Park – working on a $300K, six-month retainer, based on its $50K a month budget proposal – outlined its proposal in a 21-page memorandum released by the senator and first reported by Roll Call. That document notes two fundamental goals: one, to “obliterate whatever intellectual justification might still exist for corn-based ethanol among policy elites”; and, two, to demonstrate to lawmakers that there is a “political price to allowing ethanol policy to drive up the cost of food.”

Glover Park declined to comment. GMA communications director Scott Openshaw did not return a phone message.

“It seems there is a ‘group-think’ mentality when it comes to scapegoating ethanol for everything from high gas prices, global food shortages, global warming and deforestation,” Grassley said on the Senate floor May 15 in a speech defending ethanol. His home state of Iowa is the top ethanol producer in the U.S.

Producers Downplay Food Impact

Ethanol groups, meanwhile, have moved to downplay ethanol production’s effect on food costs and are arguing that it is mitigating rising fuel prices.

Renewable Fuels Now, a coalition of ethanol groups and corn producers that works with Manning Selvage & Lee, notes that ethanol has made gas cheaper by as much as 40 cents a gallon by expanding the fuel supply.

5W HITS THE ROAD WITH JACKIE

5W Public Relations is handling the summer bus tour of author Jackie Collins, who will visit more than a dozen Harrah’s Entertainment casinos to promote her new book, “Married Lovers,” to be published next month by St. Martin’s Press.

The best-selling author will meet and greet fans as part of the “Jackie Collins Rewards Access Lifestyle Event” that is sponsored by Harrah’s.

They will get the opportunity to “dine and dish” with Jackie. For instance, Collins will read from her book June 14 at Caesars Atlantic City’s Palladium Ballroom.

unch will be served and Jackie promises to “circulate around the room meeting guests during coffee and dessert,” according to the casino’s site. Fans will receive a pre-signed autographed copy of Married Lovers as part of the $40 package.

Collins has slated visits to facilities in Chester (Penn.), Elizabeth (Ind.), Metropolis (Ill.), Cherokee (N.C.). New Orleans, and Bossier City (La.).

KGA LEADS SPANISH BID FOR PENNSY ’PIKE

Kearsarge Global Advisors handled the successful $12.7B bid of Spain’s Abertis Infraestructuras (teamed with Citigroup) for a 75-year lease of the Pennsylvania Turnpike.

Jim Courtovich, managing partner of KGA, told O’Dwyer’s his firm began work with Barcelona-based Abertis three years ago.

“It was a bit more than just lobbying and communications,” he said. KGA “set up the initial meetings with banks, industry leaders and other key people that covered all aspects of the transaction.”

Courtovich, who was senior counselor to investor Ted Forstmann, VP at Ketchum, PA manager at Burson-Marsteller and aide to ex-Texas Sen. Phil Gramm before launching KGA, was assisted by staffers Addison Smith, Graham Miller, Sean McNabb and John Durbin.

Abertis is a top private toll road operator. It directly manages 2,000 miles of toll rolls and indirectly handles another 3,000 miles in 10 countries.

The company operates infrastructures such as Orlando’s Sanford Airport, Concourse E of Atlanta International Airport and Burbank Airport.

Pennsylvania Gov. Ed Rendell said the lease deal represents a “great day” for the Keystone State. The transaction caps toll rate hikes, and puts the plan to place tolls on I-80 on the shelf.

Lease proceeds will be earmarked to shore up Pennsylvania’s crumbling infrastructure. Pennsylvania has 6,000 structurally deficient bridges, which is the highest of any other state. The repair bill for those spans is in the $11B range. Pennsylvania’s legislature must approve the Abertis deal.

Goldman Sachs, with a $12.1B bid, was runner-up to Abertis. A group led by Australia-based Macquarie placed third in the competition.

BIG MOUTH GUIDES NETFLIX PLAYER

Big Mouth PR is handling the launch of the Netflix Player by Roku, a digital box that allows users of the mail-order video rental service to stream movies from the web to their TVs.

The $100 device puts Netflix in direct competition with the Apple TV online video rental service.

Amy Bonetti, a veteran tech PR pro who worked in-house at Apple for 11 years and earlier at Atari, said she was hired in February to handle ongoing PR for Roku but was tapped by both Netflix and Roku for the player launch.

She told O’Dwyer’s that the May 20 launch generated more than 400 media hits that day.

The New York Times noted the new device “will most likely jolt the merging market for equipment that brings Internet video to TVs.”

Netflix’s stock was up more than four percent on news of the launch and an upgrade by Lehman Bros.

The company has more than eight million subscribers to its through-the-mail video rental service. The new device gives users instant access to more than 10K movies and TV show episodes, which is only about 10 percent of Netflix’s library.

Roku, based in Saratoga, Calif., had previously focused on digital music players.

MURDOCH PUTS HIS GUY IN CHARGE OF WSJ

News Corp. CEO Rupert Murdoch has officially installed Robert Thomson as managing editor of the Wall Street Journal.

The former Times of London editor takes over for Marcus Brauchli, who stepped down last month.

Thomson, whom Murdoch named publisher of the WSJ after he completed the $5.6B Dow Jones & Co. takeover, gets the editor-in-chief position at DJ&C.

The 47-year-old Australia native will also oversee editorial operations of Dow Jones Newswires. Neal Lipschultz, Newswires managing editor, reports to Thomson.

Les Hinton, CEO of DJ&C, takes over Thomson’s publisher job at WSJ. Paul Gigot, editorial page editor, reports to Hinton.

The Dow Jones Special Committee, which is supposed to protect the editorial integrity of the papers acquired by Murdoch, approved the Thomson appointment.

Hinton apologized to the Committee for not advising it beforehand that News Corp. ironed out an agreement that led to Brauchli’s resignation.

The company promises to seek Committee approval prior to making any future changes that could affect an editor’s duties.

MG SAYS CUTS WILL HIT 750 STAFFERS

Media General said it will have slashed 750 jobs from its newspaper and television stations by October for a cost cut of $40M annually.

The job cuts started last year at properties like the Tampa Tribune and Winston-Salem Journal, as well as 22 network-affiliated stations and 22 daily newspapers in the south.

MG blamed the weakness in classified advertising for a nearly 11 percent revenue drop in April to $79M.

Following the end of cuts in the third quarter, MG said it will have about 6,150 employees.

DOUGLASS JOINS OBAMA

Linda Douglass, a veteran journalist and former Justice Department and Capitol Hill correspondent for CBS News and ABC News, has joined Barack Obama’s presidential campaign as a senior communications strategist and spokeswoman.

She had recently been a contributing editor to the National Journal and a host on XM satellite radio.

“I just thought I couldn’t possibly sit on the sidelines any more,” she told the New York Times.

Douglass told the Times that she helped Obama prep for a debate at Harvard in April 2007, when she was not working as a journalist and did not expect to return to the business.

TIME WARNER SPINS OFF CABLE

Time Warner is splitting off its cable unit, a move that will result in a $9.25B dividend to the parent company.

CEO Jeff Bewkes is making the move at TW for “greater strategic, financial and operational flexibility.” The reshaped TW will now focus on “creating and distributing branded content across traditional and digital platforms worldwide.”

Time Warner Cable CEO Glenn Britt believes the new freedom enables TWC to deliver “innovative telecommunications services” to its customers.

TWC has 14.7M customers who subscribe to one or more of its video, high-speed data and voice services. They represent 33M “revenue generating units.”

IHT’S ORESKES TO AP

Michael Oreskes, executive editor of the International Herald Tribune, is moving to New York to become the Associated Press’ managing editor for U.S. news, a new post.

The 53-year-old journalist began his career at the New York Times. At IHT, he was handling the integration of the two papers.

Circulation at the IHT has been steady, but the paper anticipates more competition from the Wall Street Journal under News Corp. ownership.

IHT publisher Stephen Dunbar-Johnson and Bill Keller, executive editor of the NYT, are looking for a replacement for Oreskes.

THOMSON REUTERS SLICES 140

Thomson Reuters is cutting 140 editorial jobs by the end of the year as the consolidation of Thomson Financial News and the Reuters wire takes hold.

David Schlesinger, editor-in-chief, informed staffers via memo that half the cuts will take place in Europe.

The cutbacks are needed because “when two similar and once competing organizations come together, there is natural overlap and duplication in coverage,” said Schlesinger’s note.

Thomson acquired Reuters in a $16B cash and stock deal last month. It employs 50K people worldwide.

HULU TOPS NETS

Hulu, the video website partnership owned by News Corp and NBC Universal, has more viewers than any other network-owned site after debuting a little more than a month ago.

The site, which features popular programs like “The Simpsons,” attracted 63.2M viewers in April, according to Nielson. That topped No. 2, Walt Disney Co’s ABC.com.

Reuters reports that Hulu gets raves from tech-savvy users and bloggers who like its “cleanly designed site and trove of full-length shows.”

SCHULZ BECOMES TOP AMERICAN

Nick Schulz has been named editor-in-chief of The American, the in-house publication of the American Enterprise Institute.

The former political editor at FoxNews.com had been senior editor of the magazine.

Schulz is taking over for James Glassman, who has been nominated to become the nation’s top propaganda czar, succeeding Karen Hughes.

(Media news continued on next page)

NYT'S RICH CONSULTS FOR HBO

Frank Rich, New York Times Sunday political/public affairs op-ed columnist and former theater critic, has signed on as creative consultant at Time Warner’s HBO. He is to initiate and develop pay TV projects.

In a joint statement from Richard Plepler, co-president of HBO, and Michael Lombardo, president-programming group and west coast operations, Rich is hailed as “one of the smartest and most astute observers of popular culture.”

Rich, in turn, says HBO has “always been the gold standard for some of the best work in TV.”

Rich, a fierce critic of President Bush and the invasion of Iraq, has recused himself from writing about TW and HBO in his column.

CONDE NAST ACQUIRES ARS TECHNICA

Conde Nast has acquired the 10-year-old tech news website Ars Technica and said it will be added to CN’s Wired Digital operation.

Terms of the deal were not disclosed.

AT counts 4.4M unique visitors per month and more than 30M page views.

CN said the addition is part of a plan to build a network of highly trafficked tech sites.

The publishing company is also re-launching Webmonkey, a site for web developers, in the Wired Digital network, and has plans to revive HotWired.com. Both of those sites were acquired from Lycos, as was Wired News, in 2006.

With the addition of AT, Conde Nast said the Wired network reaches more than 18M unique visitors per month.

Ken Fisher, a co-founder and editor-in-chief of AT, continues to manage the site.

NBCU UNVEILS HEALTH NETWORK

NBC Universal is creating a Digital Health Network to deliver videos produced by the General Electric unit over the `Net.

The program kicks off combining RightHealth, Healthline Networks and iVillage’s YourTotalHealth.com. They have a combined audience in the 27M range.

George Kliavkoff, head of digital operations, expects to add health news produced by “NBC Nightly News, “The Today Show” and local NBC affiliates to the mix.

LIEBERMAN SAYS YOUTUBE AIDS AL-QAEDA

Connecticut Senator Joe Lieberman wants Google’s YouTube unit to ban video content produced by terror organizations such as Al-Qaeda.

In a May 19 letter to Google CEO Eric Schmidt, Lieberman wrote that Islamic terrorist organizations are using YouTube to “disseminate their propaganda, enlist followers and provide weapons training.”

His Homeland Security and Governmental Affairs Committee has found Al-Qaeda branded videos on YouTube documenting “horrific attacks on American soldiers in Iraq or Afghanistan.”

Those videos play a “significant role in the process of radicalization, the end point of which is the planning and execution of a terrorist attack,” according to Lieberman. The Independent-Democrat believes YouTube “unwittingly, permits Islamist terrorist groups to maintain an active, pervasive, and amplified voice, despite military setbacks or successful operations by the law enforcement and intelligence communities.”

The Committee has issued a report called “Violent Islamist Extremism, the Internet and the Homegrown Terrorist Threat” that fleshes out Lieberman’s charges.

The Senator faults YouTube for failing to live up to its “community guidelines” that ban “graphic or gratuitous violence.”

Google says it has removed a number of videos that depicted violence or used hateful speech. The company understands Liberman’s concerns, but “encourages free speech and defends everyone's right to express unpopular points of view."

SLOANE GAINS LIBERTY

Sloane PR is doing financial and corporate communications work for Liberty Media, the company founded by media mogul John Malone.

Malone just wrapped up a battle of the titans match with Barry Diller over the carve-up of Diller’s IAC/InterActive Corp. into five separate companies.

Malone sued to stop that plan because he felt his ownership stake in IAC would become diluted.

Diller and Malone declared peace on May 14. The split-up goes forward, while Malone gains more board seats at each company.

Sloane, SPR’s managing director Whit Clay and VP Amanda Cheslock are pitching Wall Street about the transformation of Liberty into three tracking stocks to “reflect Liberty’s equity value and its unique portfolio management strategy,” according to the PR firm head.

Greg Maffei is CEO of Liberty.

HISAOKA DIES AT 48

Joan Hisaoka, who ran Washington-based Hisaoka PR, died of cancer on May 14. She was 48.

Her shop represented travel/hospitality, arts/entertainment, beauty/fashion and real estate/retail clients throughout the D.C. region.

Hisaoka, a board member of the Restaurant Assn. Metropolitan Washington, launched the National Cherry Blossom Festival’s first tie-in with area eateries, "Cherry Picks."

She opened her firm in `88, after serving as an assignment editor for WTTG-TV's "Ten O’Clock News," and working in FM radio.

The Mensa member received the Silver Anvil from PR Society and was ranked on Washington Business Journal’s roster of the 50 most powerful and influential women in the district.

Correction: An item in the 5/21 NL misspelled the name of Diana Banister and Craig Shirley’s Virginia-based public affairs firm. It is Shirley & Banister Public Affairs; www.sbpublicaffairs.com.

"Intellectual property theft has become the crime of the 21st century," says a 34-page packet that the International Anti-Counterfeiting Coalition provides to college professors who teach a course sponsored by IACC members (e.g. the Coach course at Hunter College in the spring of 2007).

In France, it notes, it is illegal either to sell or possess counterfeits. If caught, you could go to jail for up to three years or get fined $300K! Possessing fakes could result in a fine of $18K in Italy.

"Counterfeiting is wrong, legally because it is stealing the intellectual property of another, and morally because stealing is wrong," says the packet.

The $650 billion in counterfeit products hurts many including New York, which loses $2B a year, or enough to hire 40,000 teachers, it says.

We couldn't agree more.

Some of the knock-offs of handbags, watches, etc., are of poor quality but others (especially those produced in Guangzhou, China) have taken a "giant leap in volume and quality," says the IACC.

We deplore this ripping off of famous brands and hope that such companies as Coach, Apple, Reebok, Calvin Klein, Coty and others who are members of the IACC will shed a tear for the group of 11 authors whose works were ripped off for about 15 years by the PR Society, which refuses to give them a nickel.

This was truly total "theft of intellectual property" in that exact products were reproduced and sold (news articles, chapters of books, in-depth reports, etc.). No inferior parts were involved. Cost of production was lower than anything that could be obtained in the worst Chinese factory. A PRS employee came in early to this chop shop to run off the copies and stack them like cordwood. Members and others who purchased upwards of 3,800 info packets a year ($18 for members, $55 for non-members) were given an invoice that said enclosed are original copies that must be returned because copying such articles is illegal. But only copies were ever sent out and users could keep them three weeks although buyers were assured PRS would send out any of the 1,000 different info packets "within 24 hours." PRS leaders, staff and recipients couldn't care less that anything wrong was going on. It was an ethical vacuum that persists to this day because current leaders show no interest in righting this wrong while at the same time claiming worldwide leadership in PR ethics. PRS members at Werth Assocs. are heavily involved in the campaign of client IACC.

While the IACC has a campaign that points out labor and other abuses involved in counterfeiting, China Labor Watch is publicizing labor abuses in China, hoping to "shame" companies like Wal-Mart and Apple into curbing such abuses.

Coach products are made in China, the U.S., India, Korea, Singapore and other countries by "independent manufacturers" that meet Coach's "quality and business practice standards," says the annual report.

IACC's "Professor/Faculty Advisor Project Kit" has plenty of horrible stories about labor practices in China including employers who break the legs of children and improperly reset them "so they cannot leave or go to the streets to play." Their small hands are "prized" for handling tiny parts such as for watches.

Factory workers earn about 65 cents an hour (1/40th of American, European and Japanese pay) and often work long hours under bosses who may inflict physical punishment. They mostly live in cramped, squalid conditions and work under often dangerous conditions that would be "utterly illegal" in the U.S. (from China, Inc., by Ted Fishman). "Industrial accidents" killed 14,382 Chinese in 2006.

The U.S. has again become a slave economy only this time the slaves are in China and other countries rather than the South. Our annual trade deficit with China is about $250B, a record for a single country.

Labor conditions for those making counterfeits are bad but companies often don't know who is making their products. They give an order to a contractor who parcels it out who knows where? Inspecting plants is difficult because reporters are barred and in any case, workers are rehearsed. "Two sets of books" may be kept.

Writes Fishman: "Global companies find China's exceedingly lax protections for intellectual property a boon…large U.S. firms routinely make their suppliers cut prices every year but…don't need to know how those costs are cut or what standards are violated…China's eastern coast, which supplies half our seafood imports, is a mass of belching factories. The shrimp and fish need massive antibiotics to survive the toxic waters."

There is intense interest among Hunter professors in the Coach-sponsored class because they have been concerned for several years about alleged violations of academic freedom by the Hunter administration.

The sponsored "stealth" class, which was only discovered by accident after it took place, and the fact that outsiders were allowed to monitor it, are four-star atrocities to them.

Bargaining unit members of the college, responding to an April 2006 survey, found that faculty/staff opinions were often "not valued"; that college president Jennifer Raab and senior administrators do not value "shared governance," and that "there is a prevailing expectation of reprisal from either the college president or a senior administrator when someone offers an opinion on a controversial institutional issue." A total of 1,615 surveys were mailed and 286 were returned (18%).

An odd side to this story is that it has been ignored by the New York Times although its education reporters have known about it since last fall…Hunter Film & Media Studies Dept. chair James Roman says corporate America has a "pronounced role" in higher education and saw no problem with the Coach course…we see corporate PR as especially involved in PR curricula. Many PR professors and teachers work for corporations and institutions on the side.

--Jack O'Dwyer